Second Circuit Finds Insurer’s 52-Day Delay in Disclaiming Coverage Did Not Violate Insurance Law Section 3420(d)(2)’s Timely Disclaimer Requirement

The court of appeals for the Second Circuit recently confirmed that a liability insurer that waits to deny coverage so that it can investigate the facts giving rise to the disclaimer will not be estopped from denying coverage under Insurance Law Section 3420(d)(2), provided that the insurer does not use the investigation as a tactic to delay the disclaimer. United Fin. Cas. Co. v. Country-Wide Ins. Co., No. 18-3022, 2019 WL 2724267 (2d Cir. July 1, 2019). Section 3420(d)(2) requires
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Texas Supreme Court Opens the Door for Statutory Damages After Appraisal

Good faith use of the appraisal process to resolve legitimate valuation disputes under a property policy is no longer an absolute defense under Texas law to claims for statutory delay damages. In a pair of decisions regarding appraisal, the Texas Supreme Court held that when appraisal is invoked after the commencement of litigation, the prompt payment of the award by an insurer precludes statutory bad faith claims under Chapter 541 of the Texas Insurance Code, but potentially allows for statutory
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When a Bad Apple Spoils the Bunch: An Appraiser’s Bias May Cost the Policyholder in the Long Run

In a long-awaited decision, Colorado’s highest court ruled a designated appraiser in a property insurance dispute must remain impartial and free from favoring one party over the other. Specifically, the Supreme Court held that the policy language required appraisers to be “unbiased, disinterested, and unswayed by personal interest.” This decision is a win for the insurance industry, although the Supreme Court created a framework that is certain to lead to disputes about an appraiser’s partiality in the future. The decision
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Part 1: The California Consumer Privacy Act — What Insurers Need to Know

Assembly Bill No. 375, better known as the California Consumer Privacy Act (CCPA), is likely the most robust and sweeping privacy law in the United States. This is not surprising as California is notoriously at the forefront of passing privacy legislation, even though close to 20 other states are also taking steps to pass similar legislation. The CCPA, which becomes effective January 1, 2020, creates a number of consumer rights regarding the collection, storage, selling, and processing of personal information,
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Pennsylvania Federal Court Reinforces The Principle That Liability Policies Insure Against Legal Obligations Owed To Others

Defense and indemnity obligations owed under liability policies depend on the allegations made in the underlying lawsuit. In NVR, Inc. v. Motorists Mut. Ins. Co., 2019 WL 989393 (W.D. Pa. Mar. 1, 2019), NVR, an additional insured under a CGL policy sought coverage for two lawsuits that arose out of a heater explosion at a construction site. NVR was the defendant in personal injury litigation. In a separate lawsuit, NVR sought recovery for property damage that it incurred due to the
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Fifth Circuit: False Imprisonment Caused “Bodily Injury” During Subsequent Policy Periods Sufficient to Trigger Coverage

In a notable deviation from decisions across the country, the Fifth Circuit recently ruled that injuries from false imprisonment could be sustained after the actual false imprisonment itself ended, triggering two insurers’ duty to defend. Travelers Indem. Co. v. Mitchell, No. 17-60291, 2019 WL 2276694 (5th Cir. May 29, 2019). The insurers, whose policies did not come into existence until after the false imprisonment ended, were found obligated to defend a Mississippi County in a civil rights lawsuit stemming from
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Eleventh Circuit Holds Unlicensed Professional Was Not Engaging In “Professional Services”

The courts frequently apply insuring agreements broadly. However, in a recent decision, a court narrowly applied the definition of “professional services” to restrict coverage. Specifically, in Chapman v. Ace American Insurance Company, the Eleventh Circuit determined the services provided by an individual holding himself out as a counselor did not constitute “professional services.”     The underlying lawsuit concerned Mark and Barbara Chapman’s ten-year old son who was diagnosed with ADHD and had a history of behavioral problems. The Chapman family
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Absent Policyholder Demand To Settle, Seventh Circuit Affirms Dismissal of Bad Faith Action Against Insurer After Unexpected Excess Judgment

The Seventh Circuit, applying Illinois law, recently tackled the highly-charged issue of a bad faith claim against an insurer for failing to settle for the policy limit. In Surgery Center at 900 North Michigan Avenue, LLC v. American Physicians Assurance Corp., Inc., the Seventh Circuit closely scrutinized the facts and affirmed the trial court’s decision that the insurer did not act in bad faith.  The coverage dispute arose between the Surgery Center at 900 North Michigan Avenue, LLC (Surgery Center)
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Climate Change Litigation: Where Are the Coverage Suits?

There is an interesting question surrounding the present generation of climate change lawsuits currently working their way through the court system. Specifically, where are the duty to defend actions related to these suits? Background By way of background, there are two types of climate change lawsuits currently working their way through the courts: Those filed by government entities that seek to hold energy companies responsible for the costs that government entities are forced to expend in adapting to climate change,
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Contractual Liability Exclusion Defeats General Contractor’s Bid Against Six Insurers for Defense and Indemnity in West Virginia

West Virginia’s highest court recently handed down a well-articulated decision on the scope of a CGL policy’s insuring agreement and exclusion for contractual liability, which could be influential to other courts who struggle with these commonly-litigated issues. On May 1, 2019, the West Virginia Supreme Court of Appeals unanimously upheld summary judgment to six insurance companies in a declaratory judgment action relating to a property developer’s suit against its general contractor over construction defects at a shopping center. The insurers
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